SENATE BILL 7

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Elizabeth "Liz" Stefanics and Gail Armstrong and

Marian Matthews

AN ACT

RELATING TO RURAL HEALTH CARE PROVIDERS; CREATING THE RURAL HEALTH CARE DELIVERY FUND TO PROVIDE GRANTS TO DEFRAY OPERATING LOSSES OF RURAL HEALTH CARE PROVIDERS AND FACILITIES THAT PROVIDE NEW OR EXPANDED HEALTH CARE SERVICES; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] RURAL HEALTH CARE DELIVERY FUND.--

          A. The "rural health care delivery fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations, gifts, grants, donations, income from investment of the fund and any other revenue credited to the fund. The department shall administer the fund, and money in the fund is appropriated to the department to carry out the provisions of this section. Expenditures shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of human services or the secretary's authorized representative.

          B. A rural health care provider or rural health care facility may apply to the department for a grant to defray operating losses incurred in providing inpatient, outpatient, primary, specialty or behavioral health services to New Mexico residents. The department may award a grant from the rural health care delivery fund to a newly constructed rural health care facility or rural health care facility that is providing a new health care service as approved by the department that covers operating losses for the new or expanded health care service, subject to the following conditions and limitations:

                (1) the rural health care provider or rural health care facility meets state licensing requirements to provide heath care services;

                (2) grants are for one year and for no more than the first five years of operation as a newly constructed rural health care facility or the operation of a new or expanded health care service;

                (3) grants are limited to covering operating losses for which recognized revenue is not sufficient;

                (4) the rural health care provider or rural health care facility provides adequate cost data, as defined by rule of the department, based on financial and statistical records that can be verified by qualified auditors and which data are based on an approved method of cost finding and the accrual basis of accounting; and

                (5) in the case of a rural health care provider, the provider commits to a period of operation equivalent to the number of years grants are awarded.

          C. As used in this section:

                (1) "allowable costs" means necessary and proper costs defined by rule of the department based on medicare reimbursement principles, but "allowable costs" does not include fund transfers to parent corporations;

                (2) "department" means the human services department;

                (3) "health care services" means services for the diagnosis, prevention, treatment, cure or relief of a physical, behavioral or mental health condition, substance use disorder, illness, injury or disease;

                (4) "newly constructed" means a rural health care facility constructed after June 30, 2023;

                (5) "operating losses" means the projected difference between recognized revenue and allowable costs for a grant request period;

                (6) "recognized revenue" means operating revenue, including revenue directly related to the rendering of patient care services and revenue from nonpatient care services to patients and persons other than patients; the value of donated commodities; supplemental payments; distributions from the safety net care pool fund; and distributions of federal funds;

                (7) "rural health care facility" means a health care facility licensed by the department of health that provides inpatient or outpatient physical or behavioral health services and is located in a county that has a population of one hundred thousand or fewer according to the most recent federal decennial census; and

                (8) "rural health care provider" means an individual health professional or a health facility organization licensed by the department to provide health care diagnosis and treatment of physical or behavioral health and is located in a county that has a population of one hundred thousand or fewer according to the most recent federal decennial census.

     SECTION 2. APPROPRIATION.--Two hundred million dollars ($200,000,000) is appropriated from the general fund to the rural health care delivery fund for expenditure in fiscal year 2024 and subsequent fiscal years to carry out the purposes of the fund. The human services department may use up to three hundred fifty thousand dollars ($350,000) each year from the fund to administer the fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

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